Mortgage Finance, Affordable Homeownership, Regulation & Reform
Policy Brief | April 1, 2010

Homeownership Done Right: What Experience and Research Teaches Us

Center for American Progress
David M. Abromowitz, Janneke Ratcliffe

Evidence abounds that lower-income homeowners benefit from well-designed affordable homeownership programs, many of which are weathering the foreclosure crisis reasonably well.

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In the wake of the U.S. housing crisis that began in 2007 and still reverberates across the country today, as many as 12 million families may lose their homes to foreclosure. Our national homeownership rate could well drop from a high of over 69 percent in 2004 to below 64 percent by the time we are done, which would be the lowest rate since 1968. All this is happening while nearly 100 million Americans live in households spending more than 30 percent—and many more than 50 percent—of their incomes on shelter. This is hardly a path to encourage what for many is part and parcel of the American Dream.

Sensible policymaking requires a clear understanding of the real facts of a situation. This paper provides a short, direct summary of the studies, data and other available evidence regarding home mortgage products and programs designed to build homeownership among first-time homebuyers in our minority and lower-income communities and then evaluate what works.

As the report demonstrates, many affordable housing programs, including Community Reinvestment Act lending by regulated financial institutions worked as intended. These successes can help point the right way forward out of the U.S. housing crisis.

The UNC Center for Community Capital conducts research and policy analysis on ways to make financial services work better for more people and communities.


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